It’s no longer a secret that China has the fasted growing consumer rate in the entire world for Luxury Consumption.
In addition to that, the luxury e-commerce market is increasing very fast with the new Generation of Luxury Buyers :: the Millenials.
What E-Commerce Strategy for a Luxury Brand in China ?
The answer is to respond to the demand from the new Chinese consumers.
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Why is e-Commerce so Successful in China ?
Lately Western luxury brands have launched their own campaign in Asia with the intention to sell their goods in mainland China. The sales of these luxury brands are consistently increasing. As a result, that the domestic sales and the sales in overall Asia has halted.
Luxury Brands are investing on E-Commerce in China
From this information we can see that the Chinese consumers prefer to buy their goods from a luxury brand online rather than purchasing a product of a store in China. In other word the luxury brands are taking more and more control on the online platform. We can also conclude that luxury e-commerce market in China is evolving and that this industry will mature in 2018.
An example of brands who targeted this new group of consumers are Gucci and Louis Vuitton. They have launched their own e-commerce stores to sell their wide assortment of goods directly to customers in China.
Other brands like Calvin Klein and Ralph Lauren are planning to invest min the online e-commerce market of China and to work with well-known Chinese influencers. Not only are they willing to do this, there are also plans to build more physical stores, so they have a bigger presence in China and will be recognized by the consumers. “Consumers in China got accustomed to making big purchases online much faster than the rest of the world and luxury brands needed to start thinking more about how to take advantage. I think that’s what we saw happen this year,” said Xia Ding, president of JD.com’s fashion business.
The biggest e-Commerce Plateforms in China for Luxury Brands
Today the biggest e-commerce players in China are Tmall and JD.com. They are dominating the Chinese online consumer market and have a fierce competition to win over as many luxury brands as possible.
Tmall launchs Luxury Pavillon
If you want to sell on Tmall, this dedicated plateform can be a good option and can get great visibility among Chinese millenials. https://luxury.tmall.com/
During the Chinese Singles’ Day Alibaba’s consumer were offered special promotion from luxury brands like Burberry, Tag Heuer and Rimowa.
WeChat is great space for Luxury Brands, with Dedicated Stores, and mini Programs the WeChat private space is perfect for Luxury Managers to communicate in private with their client. Even the digitally shy Céline created a WeChat account to attract to Chinese customers on the social app.
Entering the Chinese consumer market creates a lot of opportunities for a brand but in the beginning, it is definitely a challenge to entice the Chinese consumers. Luxury brands are testing what WeChat has to offer.
The app has 900 million users and is best used for luring consumers to make a purchase in store. Luxury brands such as: Cartier, Céline and many more, have also used this platform to sell directly to their target group in WeChat.
JD is a good Option for Premium Brands
We like JD because it is quite qualitative, have less fake and it can be a cost effective way to reach Premium Consumers.
It is a good place for Premium Brands, and easier to operate compare to tmall. As you can see, many luxury Brands already sell on JD.com
It’s important to provide consumers with good features like online appointment booking and delivery. JD.com offers one of best features with their same-day delivery, which makes the consumers very pleased. “The Chinese customers are very resourceful. The ultimate goal is to get the product into the hands of JD.com clients. The capability is beyond our own imagination, let alone capability. They can reach millions of clients the next day in all cities in China, which is something I’m not able to even comprehend”, Phillip Lim CEO.
Fartech are investing in China and partner with JD
Data of Farfetch, a company that sells inventory from 800 brands and boutiques, took an investment of $300 million from JD.com and formed a partnership with the intention to operate directly in China. Besides that, L2’s data shows the percentage of fashion brands available through Farfetch in China. It shows that Farfetch has increased from 76 percent in 2016 and in this year a noticeable 85 percent. And Farfetch is not the only company that has a substantial growth, Yoox increased from 72 to 78 percent and Net-a-Porter rose from 48 to 57 percent.
The fashion E-Commerce plateform is also popular among luxury Buyers, and have a presence on this plateform can be a good choice for Premium Brands.
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Your Own eStore
To get your own Store can be a good strategy, specially if you can link it to your WeChat and if your store is mobile friendly.
You can attract Buyers, that want to be sure to buy real products.
Have your own Store is usually associated of a Digital marketing campaign to attract Visitors.
RED (Little Red Book)
The Hottest App of the moment is a greatest place to sell luxury products. With the High End community, mainly Girls and international Consumers, Little Red Book is the perfect place for Influencers and Super quality Content.
It is the best place to communicate and allow since 2017 Brands to have ECommerce Stores and sell to Consumers.
To perform on RED, feel be free to ask us. we have Great Information and case studies
Sell via online Distributors , Resellers and Daigous ( Personal Shoppers)
The Grey market in Luxury is important, and many Brands choose to sell via this large networks of Resellers. It is a Profitable strategy, because these Dealers take low Commission and work on Brand exposure.
It is better if the Brand take control of this network to avoid Problem.
Have Strong E-Commerce Presence help Fighting counterfeiters
A report of Bain & Co shows that 30 percent of the world’s luxury purchases are made by Chinese customers. Despite that only 7 percent of those are made in China self. Because of the fact that Chinese consumers rather buy luxury goods online than in domestic stores. Overall, we can see that Chinese consumers are purchasing more luxury goods like never before and that the sales of luxury bands will grow online as domestically.
A consequence of this evolvement is that high-end brands have to deal with counterfeiters. What it boils down to it that some counterfeiters want to enjoy the same success as the luxury brands. As respond to that luxury brands have confronted the counterfeiters head-on, in order to stop counterfeiters of making a name for themselves. “Luxury brands are finally responding to the hard reality that their goods are being sold online in China, regardless of whether or not they authorize it,” said Liz Flora, the editor of Asia Pacific research at L2.
“If a brand doesn’t have its own online sales presence in China, it is basically handing over the digital shopping experience to grey-market and third-party sellers.”
For example, luxury brand Richemont has cleaned up its inventory in China in order to start with a blank slate where the group’s brands, including Piaget and Cartier, can own their sales channels.
Other brands, such as: Ralph Lauren, Louis Vuitton and Gucci, have collaborated with e-commerce platform Alibaba to prevent counterfeiters to sell on the platform.
GMA a Smart Partner in China
Why Luxury Brands may need help of GMA ?
- Specialized in e-Reputation, we can improve Brand Image online.
- We know how to target High End Consumers
- We have good experience of Social Media Marketing
- We leverage KOLs for Brands
- We are Results Driven
- We have a Premium Division dedicated to Luxury Brands
Feel free to contact us :
- To receive our Case studies in Fashion / Luxury
- To discover our New Solution for Luxury Brands
- To have a Consultation on your Ecommerce Situation
Some of our clients.